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Food Retail
“Retail grocery turnover is crisis-proof and has been growing steadily for years. The credit-worthiness of the tenants is excellent, while lease terms of ten years and more is standard in the industry.
Private German retail investment house x+Bricks has already added to its ambitious acquisition programme by buying a portfolio of 13 retail properties from an institutional investor, for a price of €80m.
The company launched at the recent Expo Real in Munich with a small management team headed by Sascha Wilhelm, previously managing director at Corestate Capital. Thomas Dänzel, ex-head of retail investment at Colliers has joined as chief transaction officer, while the well-known founder and CEO of Acrest (later bought out by JLL), Stefan Zimmermann, is also beefing up the senior management team as supervisory board member and senior advisor.
REFIRE met with members of the senior team this week in Frankfurt.
X+bricks is focusing on grocery-anchored German real estate, such as supermarkets, discounters and retail parks. Typical tenants would be Edeka, Rewe, Aldi, Lidl, Kaufland and Real. The company has €100m in equity capital through a bond-issuing vehicle registered in Luxembourg, and the company says further capital commitments are waiting in the wings, and will shortly be called down.
While keeping the name of the seller anonymous, CEO Wilhelm commented: "We are very pleased that we were able to acquire a stable west German portfolio with strong anchor tenants in the current competitive market environment. This proves the good market access and strong capital base of x+bricks. With the new acquisition, the real estate holdings of the company, founded in August, will increase to around €300m with a simultaneous increase in the number of tenants."
The properties are exclusively located in west German cities such as Braunschweig, Wolfsburg and Saarlouis, and have a total leasable area of around 44,000 sqm, of which 80% are anchored by grocery retailers with long lease terms. Weighted average lease term for the portfolio is almost 10 years, while occupancy is 97%.
The main tenants of the retail parks and food-anchored district centres are supermarket chain Rewe and discounter Aldi. Wilhelm said that the Schwarz Group, a family-owned retail group that operates the Lidl and Kaufland discounter chains, is as strongly represented in the firm's tenant portfolio as Aldi or Rewe. He added that x+bricks has a well-filled transaction pipeline, and he expects a major transaction with a volume of around €50m to be realized, perhaps before the end of the year.
“The high demand for local supply of fresh food can withstand any amount of online competition”, said Wilhelm. “Retail grocery turnover is crisis-proof and has been growing steadily for years. The credit-worthiness of the tenants is excellent, while lease terms of ten years and more is standard in the industry. By further standardizing lease contracts and thus the accompanying reduction in management intensity, investor interest in this asset class will continue to grow.”
